During the dot-com bubble, home appliance companies eager to get on the Internet bandwagon pitched connected fridges as the centerpiece of a digital home. They'd let you surf the Web or buy groceries right from the front of your freezer box. No, seriously--that was the idea.

The Internet fridge, of course, was a flop. Who needed such a thing? But those dot-com gurus couldn't imagine what a "connected" appliance is now turning out to be: an energy-saving appliance that knows when a utility is running at peak power and knows when to do energy-hogging functions like defrosting at off (and cheaper) hours. All this intelligence comes at a price--one of the first network-ready hot water heaters costs nearly $1,600, hundreds of dollars more than a low-end model. But there are cheaper ways to make digital energy work for you.

Welcome to the future of your electrical home: It has lots of "smart" stuff, from meters that measure your consumption to appliances that know how to save you money. That is, of course, if you can afford to buy them in the first place. It all connects to a "smart grid" that controls electrical flow so the brownouts experienced by California last decade don't happen again and the electrical grid can take advantage of new, greener energy generators like solar and wind. All this technology will use cutting-edge security to prevent hacking the grid and protect your privacy.

The way the average American home consumes electricity now is still a lot closer to the Cleavers than the Jetsons. But that's starting to change thanks to a national push to upgrade the creaky grid and a growing number of consumers eager to be greener, or simply tired of their high electric bills.

CNET interviewed early adopters, appliance makers, and utility experts to get a clearer picture of what all this "smart" stuff means to the average consumer. What emerges is a growing catalog of gadgets and technologies; some confusing, some easy to understand.

Digital electricity takes many forms. It could be a dedicated energy "dashboard" on your kitchen table, or it could be an application on an iPad, laptop, or TV. With the right apps, you'll know how to cut the stand-by power on your electronics, how much your solar panels produce, or how much juice your electric car needs to get to work.

Since these new, energy-aware products are just starting to trickle onto the market, what you do with them depends on how much money you're willing to spend upfront, your threshold for dealing with the kinks of new technology, and the eagerness of local utilities and their regulators to change the way they do business.

Baby steps to smart home
If the smart grid is where the Internet was in the pre-Web days, then Jonathan Hunt is using the home energy equivalent of CompuServe.

An ardent environmentalist, Hunt early this year installed a monitoring system called The Energy Detective (TED) to get more insight into his electricity use. It's not much to look at--just a small screen about the size of a coffee mug. To collect data, the kit comes with sensors that clamp onto a home's incoming circuits--no smart meter needed here.

Compared to products now under development, it's nothing fancy. It's basically a real-time view of your utility meter and a data store of historical use. But that information alone made the $200 purchase worthwhile, said Hunt.

"It's not like I get a bill at the end of the month and I have no idea what's causing it. Now, I have very good idea," he said. The device connects to PowerMeter, Google's electricity monitoring Web application, giving Hunt the equivalent of a home electricity speedometer.

"Right now, energy is the hot application but the smart home is more than energy. The smart home is how you manage energy, water, AV equipment, security--a lot of different things."

When you understand what causes spikes and dips in the flow of electricity, studies show that people tend to make changes, such as turning off that idle game console or installing power strips to kill the vampire, or stand-by power, load from TVs and chargers.

For frugal or environmentally minded people, electricity monitoring can become a game. That's something I've experienced myself: I've managed to cut my electrical load so that it's lower than the output of my solar panels; my home is now a net contributor to the grid, earning me a little money. This sunny summer, I've built up a $26 credit that the utility owes me.

At some point, it won't just be energy geeks who track electricity more actively than just glancing at a paper bill once a month, Hunt said. "It will start to have appeal to a broader community as energy prices go up. For now, it's targeted at people trying to go beyond the simple steps," he said.

Using an Internet analogy again, Kim Lancaster's home energy system is more like having a Windows 95 PC with a new-fangled Web browser. It gets her online where there's some useful information; now she wants more apps for it.

Her energy system is really a climate-control application grafted onto a home-automation package made by tech company Control4 which streams media to different rooms and controls lighting. She didn't use the energy portion much at first, but it came through in a crisis and she now checks it fairly regularly.

Lancaster went to great pains to build the first certified green home in Rhode Island which her family moved into late last year, but when she received her first electricity bill for $800, she panicked. She first thought that the geothermal ground-source heat pump was using far more energy than budgeted. But after checking the data, she realized the culprit was mainly her high-end audio-visual system, which runs off power-hungry servers.

She then made a number of electricity-saving changes so that the servers, a "charging station" for gadgets, and some appliances were programmed to shut off at night. That got her bills in line with what she expected.

"I couldn't have done anything without (the energy management system) because I wouldn't have known where to start," said Lancaster. Now, she looks at day-by-day electricity usage on her TV when she checks the weather. She also gets a pie chart breakdown of her utility bill, showing the differences between heating/cooling, lighting, and entertainment. She'd like to see other applications, such as water monitoring.

Cutting energy waste is just one side benefit of a smart home, said Lancaster. Earlier this summer, the irrigation system cracked and flooded the basement. Since the house had a water sensor, it sent her an alert, avoiding what could have been a multi-day leak. "Being a smart house makes the house safe and secure, which I appreciate as much as the efficiency," she said.

Energy efficiency as 'killer app'
Going the full-blown home-automation route, as Lancaster did, is a pricey affair--thousands of dollars in equipment alone. But many companies are aiming to bring the price for an energy-only system down to below a few hundred dollars. In some cases, they will only be available through utilities which are subsidizing the cost to meet efficiency targets.

General Electric, for example, is developing a basic electricity management system called Nucleus which is due next year for about $200. The nub of it is a gadget the size of a cell phone charger that tracks electricity use and communicates wirelessly with other networked gear, such as lights, appliances, and "smart plugs" equipped with networking chips. Data from the utility comes from a smart meter or, in future versions, some other gateway. Consumers can delve into the details of where their electricity goes from a PC or smartphone through a free Web site GE plans to launch.

At that price, you don't need to be wealthy to get in the game and the savings will be compelling, argued Luke Clemente, general manager of meters and sensing at GE. If you save $20 a month just by making a few changes, such as running the pool pump less often or tweaking the air conditioner settings, you will quickly pay back the upfront cost, he said.

The more expensive approach is a dedicated energy dashboard, a tablet-like device which either sits on the kitchen table or hangs on the wall. One of many dashboard providers, Cisco is testing a home energy "controller" which breaks down energy use by appliance and connects to a wireless thermostat so people can program heating and cooling. The Linux-based display can connect to back-end software and offer multiple smart-grid applications, such as EV charging and managing energy storage in batteries. But you pay for that sophistication: the estimated price tag is $900 per unit. Because of the cost, many companies, including Cisco, are selling their energy management systems through utilities, which would make them free to the consumer.

If done right, these home energy management systems should be hands-free and simple to use. Before you leave the house, for example, you hit one button and the house goes into "away" mode, automatically adjusting thermostat and lighting settings.

Connected appliances can get in on the act, too. During a very hot afternoon, the clothes dryer can get a signal that peak rates are in effect and go into eco-mode, which takes longer but is cheaper for the consumer. Or the dishwasher runs its load in the wee hours of the night once electricity falls to the lowest rate. One key feature is override: that means you can still run the dishwasher for that dinner party later on.

"Energy efficiency has become a killer application for making appliances smart," said Mike Beyerle, the innovation manager with General Electric Appliances & Lighting. "As opposed to the appliance being a portal to the Internet, the device is hanging onto the Internet instead."

In Kentucky, where GE is testing prototypes of its smart appliances with consumers, the electricity tariff can jump from 3 cents per kilowatt-hour to 11 cents per kilowatt-hour in peak times and up to 30 cents per kilowatt-hour during "critical peak periods," said Beyerle. In places with relatively high rates, such as California or the Northeast, the savings over a summer can be about $90, he said.

For utilities, there's a big difference between peak and off-peak rates since energy prices fluctuate based on demand. But in many parts of the country, we pay a flat rate all day long, so there's no economic incentive to participate in peak-shaving programs when the grid is maxed out.

The absence of time-of-use pricing in many places is just one reason that networked appliances will likely be slow in coming. In general, it's unclear when people are willing to pay more upfront for efficiency savings over time. (GE's network-aware water heater, which is its most high-tech and energy-efficient, costs $1,599, compared to about $1,000 for a tankless model and $500 or $600 for garden-variety models.) More practically, smart appliances need a connection to the utility--most likely, through a smart meter--to participate in these peak-shaving, or "demand response," programs, yet not every home will have a smart meter.

Manufacturers, though, are optimistic that energy-efficiency will be a hook to more smart-home applications. A consumer could choose to power an appliance when renewable energy is available on the grid, or a clothes washer could send a text message when the load is done.

"Right now, energy is the hot application but the smart home is more than energy," said Warwick Stirling, global director of energy and sustainability at Whirlpool, which plans to release smart appliances in 2012. "The smart home is how you manage energy, water, AV equipment, security--a lot of different things."

Not waiting for utilities
Many tech companies originally bet that utilities would be the best route to bring electricity management gear to consumers. But that may not pan out as expected. Utilities are indeed investing millions of dollars on smart-grid projects but people at utilities tend to focus on keeping the lights on, rather than developing attractive end-user applications. As a result, consumers may become more energy-savvy from different tech providers.

One is automakers. Ford, for example, teamed with Microsoft so that Microsoft's Hohm Web application can manage electric-vehicle charging. Both the Nissan Leaf and Chevy Volt will also have smartphone apps to view battery levels and schedule charging.

Plugging in an electric car every day is a hefty addition to your electricity bill--it's the equivalent to adding a whole other house to the grid. That means consumers will want to take advantage of off-peak rates and advanced features, Scott Ballantyne, vice president of marketing at smart-grid start-up Tendril Networks.

"Those (automakers) are not going to wait on the utility to solve the problem. The car guys will get a black eye when you can't charge at your home or your friends' home," he said. "That could drive a tipping point."

Consumers can also buy directly from energy tech companies. It gets trickier technically if you don't have a smart meter but there are workarounds for making a home energy network. Microsoft partnered with the maker of the PowerCost Monitor on a $250 product bundle that uses Wi-Fi and a home broadband connection to get real-time electricity data on the Web. Expect more deals like this.

Solar and home efficiency installers are another route. If you put solar panels on your roof, you may want someone to monitor that they're still working and have a portal to measure the home's load versus the panels' output.

Consumer participation in all these grid-related efforts is a bit of a wild card, particularly in places where electricity prices are low. Energy companies also worry about the "Prius effect," where people are diligent about efficiency for a short time but then lose interest. Some energy-efficiency companies, notably Opower, argue that high-tech gadgetry is really a distraction from more effective, but less glamorous measures, such as adding insulation to your attic.

But digitizing energy information in some form will still resonate with some people, even if it's only green-minded consumers who check energy data now and again. And as energy prices rise over time as projected, some product provider will figure out a way to make it fun and easy to keep a lid on home electricity.

"Technology promotes diversity--people want to use it for different reasons," said GE's Clemente. "But there's a significant segment of very environmentally conscious people who wants to use energy wisely and that segment needs to be addressed."

On Tuesday, CNET will feature an article and photos taking a look at the electricity grid from the inside--a grid control center.

Smart-grid projects hit speed bumpsIn a few cases, utilities' plans to install smart meters are getting challenged by regulators who question whether the technology's costs will be balanced by benefits to consumers.

Are consumers ready for the smart grid?Smart meters and in-home energy displays are trickling out into people's homes. But there's still some question whether the technology is consumer-friendly enough.

GE: Smart grid yields net-zero energy homeAt its research labs, GE says it has the smart-grid technology, including solar panels and efficient appliances, to build a home that has a net-zero energy consumption.

About the author

Martin LaMonica is a senior writer covering green tech and cutting-edge technologies. He joined CNET in 2002 to cover enterprise IT and Web development and was previously executive editor of IT publication InfoWorld.
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